Yesterday’s post provided an update on Puerto Rico one week after Hurricane Maria hit.

This post has more news — from Puerto Rico, not the mainland — and will discuss the island’s weak infrastructure.

Latest news

Someone on another site posted a PDF from The San Juan Daily Star dated Thursday, September 28, 2017.

The paper’s articles refute the misinformation that the big American media outlets are reporting. Big media are trying to set up a crisis situation for President Donald Trump, when, in fact, the US government’s response has been nothing short of excellent.

A summary of the articles follows. Emphases mine below.

‘Lengthy Power Restoration Effort Seen in Puerto Rico: US Power Companies’

Damage assessments are still ongoing to determine what human and equipment resources are needed. The Electricity Subsector Coordinating Council (ESCC) is working with the US government and private electricity concerns, including the American Public Power Association (APPA) which represents the Puerto Rico Electric Power Authority (PREPA):

“We thank (U.S.) President (Donald) Trump for authorizing 100-percent cost sharing by the federal government for 180 days of emergency work to help begin the process of repairing damaged energy infrastructure,” said APPA President and Chief Executive Sue Kelly …

The rates PREPA charged were not enough for the utility to maintain its infrastructure, in part due to ineffective collection efforts and longstanding mis-management that had left it in a $9 billion hole before declaring bankruptcy in July this year.

PREPA’s equipment was already “degraded and unsafe,” according to a draft fiscal report the company filed in April.

‘FEMA Activating Army to Help Restore Energy Grid’

Alejandro de la Campa, FEMA director for Puerto Rico and the Caribbean, said that:

the federal agency will for the first time activate the Army to assist in the restoration of the electrical energy system on the island following the destruction wrought by Hurricane Maria.

The Army will work with PREPA.

In addition:

He also said FEMA will increase staff and resources for the island.

‘Pentagon to Set Up Local Command Center, Send Hospital Ship’

This is about the anticipated arrival of USNS Comfort and Brigadier General Richard Kim’s establishment of a command center to oversee reconstruction efforts.

Puerto Rico Resident Commissioner Jenniffer González Colón said:

“I am grateful to the federal executive branch for all the work they continue to do as well as my colleagues in Congress, who have expressed their full support for working for Puerto Rico.”

‘US Mulls Request by Lawmakers to Waive Shipping Limits on PR’

This is about lifting the Jones Act, which would enable non-US vessels to get fuel to Puerto Rico.

As I said yesterday — which this article supports — lifting the Jones Act is unnecessary because the necessary fuel is already in port. It just needs delivery across the island:

Puerto Rico has long railed against the Jones Act, saying it raises the cost of imported basic commodities, such as food, clothing and fuel. But the [Department of Homeland Security] official said that the Defense Department and the Federal Emergency Management Agency (FEMA) have not indicated there is a lack of ships to get food and goods to the island …

“The real challenges happen to be on the island itself,” the official said, adding that there were plenty of U.S.-flagged barges and tugs available.

‘DACO Chief Urges Around-the-Clock Deliveries for 500 “Operational” Gas Stations’

Michael Pierluisi Roja, the island’s Consumer Affairs (DACO) director, announced that more than 500 filling stations are ‘operational’. That means a) they are ready to receive fuel or b) already received it but ran out.

Roja wants fuel distributors and retailers to get on the ball:

Now, he said, “it is up to the distributors to put get on the ball and respond quickly, responsibly and urgently to the gas stations,” he said. “We have done everything we can to ensure that they have operating conditions. Retailers who have not communicated with wholesalers should do so immediately and in whatever manner is necessary.”

The official acknowledged that there are wholesalers who cannot operate at night due to the lack of electricity at the Yabucoa terminal.

And he also called on gasoline retailers “to allow consumers to fill their gas tanks, so they do not have to return daily to [wait in long lines] in the middle of the crisis.”

‘Federal Agents Now Escorting Some Gasoline Deliveries’

After describing efforts to get fuel deliveries out to various towns, there is notice from Puerto Rico’s Public Affairs and Public Policy Secretary Ramón Rosario Cortés and Governor Ricardo Rosselló Nevares that it is time for public employees to get back to work:

Gov. Ricardo Rosselló Nevares said Tuesday that “government employees should report to their work stations” or, alternatively, public workers should report to the nearest headquarters of their agency or public corporation. If these are not operational, they should report to the nearest municipal Emergency Operations Center, “where their mayor will inform them where to receive aid.”

Rosario Cortés added that “personnel working in school cafeterias and food stores, school teachers and directors should report to their workstations to help with school repairs.”

Other news

An article on page 4 of the PDF lists all the relief activity to date.

Another says that 86 firefighters from the state of New York have arrived to help.

On page 5, there is an article about Puerto Rico Resident Commissioner Jenniffer González Colón’s meetings in Washington with legislators and federal agencies about long-term recovery for Puerto Rico.

The generals involved

Big Media are making a big deal about the ‘delay’ in the appointment of a general to oversee recovery efforts.

However, they are wrong.

Thomas P Bossert, President Trump’s assistant for Homeland Security and Counterterrorism, took questions from reporters at the White House Press Briefing on September 28. An excerpt from the transcript follows:

Q I’m not sure if I still understand — why has it taken eight days to get a three-star general on the ground to start organizing this? We know the island situation, et cetera. But why eight days?

MR. BOSSERT: Yeah, well, because it didn’t require a three-star general eight days ago. Let me explain to you how the process works. It will be the best way of explaining the answer.

We have a three-star general in charge of this, and we had one in charge of this out of San Antonio from day minus-eight and day minus-two and all the way through until today. We forward-deployed a one-star general — a brigadier general — to take care of ground force command once we realized the problem of logistics distribution had outstripped the capacity of the affected municipal governments …

… the change, move here[,] on day eight was to take that three-star general and to put him there, physically located in the field. I don’t anticipate he’ll stay there long, but he needs to get there, have his eyes on it, and make sure that he’s comfortable with the interaction between his forces and the governor and the municipal forces, because it’s a little bit of a different business plan model in the field, and because it’s unique and it’s an island 1,100 or so miles away from the nearest land in Florida.

And so once he’s satisfied, I think — or would expect that three-star general to recede back into his appropriate command structure. But for now, both he and his one-star subordinate command will be there in charge of ground forces and overall military marshals, and we’ll end up with a lot more people there over the coming days to try to address this really significant problem and significant need.

The rest of Bossert’s Q&A has more details on what has been done in Puerto Rico to date and what lies ahead.

Stars and Stripes has a good article from Monday, September 25, outlining all the military support that Puerto Rico will receive for the foreseeable future. In summary:

WASHINGTON – The Defense Department has dispatched about 2,600 troops to aid Hurricane Maria victims in the U.S. Virgin Islands and in Puerto Rico, where access to power and communications remained severely limited five days after the Category 4 storm struck the U.S. territory.

The military has focused primarily on conducting search and rescue operations, delivering life-sustaining supplies and providing generators and fuel to power critical infrastructure such as water treatment facilities and hospitals, Army Col. Rob Manning, a Pentagon spokesman, said Monday …

“We have the capability to do exactly what we’re doing, and we’re going to do all we can for the people of Puerto Rico and the Caribbean in the wake of these disastrous storms,” he said. “This is a long-term effort. It’s a marathon, not a sprint, and [the Defense Department] will continue to support them as long as support is needed.”

Elderly electricity grid

Puerto Rico’s electricity grid was in dire straits before Hurricanes Irma and Maria struck.

The Washington Examiner explains that the aforementioned PREPA mismanaged finances and lost a lot of manpower as workers moved to the United States:

PREPA’s power plants are 44 years old on average, Reuters reported, compared to the industry-wide average of 18 years.

Puerto Rico derives most of its power from Venezuelan oil, and PREPA relied on selling bonds to pay for the imported oil it burned at its aging power plants that need billions of dollars worth of repairs.

Sensitive to price shocks in the oil market, PREPA charges the island’s residents high rates, more than any U.S. state but Hawaii, according to the Energy Information Administration.

The power company is also grappling with a manpower shortage. PREPA has lost 30 percent of its employees since 2012 as locals migrate to the mainland to escape the island’s financial woes and stagnant economy.

“The entire operation was failing both organizationally, and in the energy generation system and transmission and distribution systems,” said Tom Sanzillo, the director of finance at the Institute for Energy Economics and Financial Analysis, told the Washington Examiner. “They were vulnerable. So the surprise to me is the electricity is on at all in Puerto Rico, with the storm or no storm. It is that serious and has been that serious.”

In May 2017, Puerto Rico entered a process similar to bankruptcy protection in order to restructure $70 billion in debt. Congress appointed a board, PROMESA, to oversee the restructuring process.

Tom Bossert said at yesterday’s press briefing that nothing had been determined yet about Puerto Rico’s dire financial situation, but that the US government would certainly help rebuild not only the electricity grid — but also the island’s water system:

Those are the two concerning elements where they’re going to have to be rebuilt, they’re going to have to be rebuilt under proper management, and they’re going to have to be rebuilt under proper rebuilding codes and standards to make sure that they can withstand a future hurricane, and that we don’t just go back to sticks and wires in the future.

So we’re going to put federal money into this. We should do it wisely and prudently. I’ve said that from this podium here before. President Trump believes in that seriously. I don’t think we’re going to have to address the debt restructuring issue in this next go-around, but if we do, and if Congress wants us to, President Trump is up to that challenge.

Financial mismanagement

In 2016, a Republican congressman, John Fleming of Louisiana, took issue with Puerto Rico’s dire financial situation and said he would vote against PROMESA. It’s a moot point now, but these were his reasons as laid out in the Daily Signal:

Puerto Rico is facing a financial mess. Much of it has been caused by poor governance on the island, but also exacerbated by the heavy hand of the United States government.

No one said it better than Pedro Perluisi, the Democratic Delegate from Puerto Rico to the U.S. House of Representatives, when he spoke at a hearing on the Puerto Rico bankruptcy bill. He said, “Part of this over-spending is definitely the result of mismanagement. I admit it. It’s embarrassing.”

But then he went on to blame Obamacare not spending enough money on Medicaid. Prior to Obamacare, he said that Puerto Rico received $350 million per year. After Obamacare, they are receiving $1.2 billion per year, but conditions are worse. And he seems to think it is because the federal government needs to spend more money.

Earlier that year, Wilbur Ross, who was still restructuring failed companies at the time — he is now Trump’s Secretary of Commerce — said:

Puerto Rico is the US version of Greece.

Yet, going back further to 2015, Breitbart said that comparing Puerto Rico to Greece was unfair to Greece. More Greeks work than do Puerto Ricans. More Puerto Ricans are reliant on government handouts than Greeks.

This is because, because of US law, Puerto Rico has an unsustainably high minimum wage which prohibits entry-level jobs from being created. The only choice is to apply for welfare:

An unsupportably high minimum wage has meant that entry level jobs simply don’t exist in Puerto Rico, USA. Official unemployment is only 12 percent, but that is only because the labor force participation rate is about 43%, as opposed to 63% on the mainland.

Perhaps to make up for this disastrous employment policy, welfare and entitlement payments are kept high. As a result, the incentive to give up public assistance in favor of a job has been substantially reduced for Puerto Rico, USA. Less than half of working age males are employed, 35 percent of the island’s residents are on food stamps, and 45.4 percent of Puerto Rico, USA is in poverty.

Even worse:

Puerto Rico USA is actually worse off than its impoverished neighbor Cuba. Although Puerto Rico’s $103 billion annual GDP is twice the size of Cuba’s, Puerto Rico’s debt of $73 billion is now over three times larger than Cuba’s debt of $23.44 billion.

The article concludes:

A quick look at Puerto Rico USA demonstrates how destructive America’s socialistic labor and tax policies can be to a group of Americans.

Indeed.

Corruption and high crime rate

In January 2014, Fox News had an article about Puerto Rico’s deep corruption and high crime rate.

At that point, 13 people had been murdered over the course of five consecutive days. Four murders took place on one night alone.

Despite it being a US territory, Puerto Rico’s murder rate is more in line with developing countries such as Mexico and the Dominican Republic.

Angelo Falcón, president of the National Institute for Latino Policy, told Fox News:

“The crime rate has been neglected for so long that it looks like the problem is not going to go away anytime soon.”

Falcón added that Puerto Rico has locked in a three-fold predicament when trying to tackle its violent crime rate – an unstable economic situation that limits available resources, a recent shake-up in the island’s police department, and a lack of attention from federal law enforcement to territory’s position as an increasingly important drug transit zone.

In 2013, Obama’s Department of Justice gave Puerto Rico $10 million to clean up police corruption over a 10-year period. I reckon that money’s long gone and the corruption even deeper.

In any event, drug trafficking has ballooned:

Puerto Rico and other parts of the Caribbean are beginning to see a trafficking surge reminiscent of the 1980s heyday of the Colombia-South Florida drug trade.

The article blames the US government for not sending more money. As if that’s going to do anything much. Surely, this is a question of morality and ethics.

On February 13, 2017, a big cocaine distribution network was busted. Insight Crime has the story:

Ten individuals — including several airport officials — have been arrested for trafficking 20 metric tons of cocaine from Puerto Rico to the United States since 1998, a reminder of the importance of this oft-overlooked territory as a drug transshipment point. 

US and Puerto Rican authorities arrested ten individuals on February 13 in a sting operation against the cocaine trafficking group, reported Hoy Los Ángeles. A previous police operation in November 2016 resulted in the arrest of two other suspects that belonged to the network …

The group would contract drug “mules,” or low-level human smugglers, to ensure that their luggage would board the plane unchecked. The US indictment indicates that up to five mules would board a plane at a time, registering two pieces of luggage that each contained between eight and fifteen kilos of cocaine.

The estimated worth of the drugs smuggled between 1998 and 2016 was $100 million.

The article also says:

The increased drug smuggling through Puerto Rico is due to greater security pressure in the Dominican Republic that has led to a shift in trafficking routes, according to the 2015 National Drug Threat Assessment by the US Drug Enforcement Administration (DEA). 

A significant portion of the cocaine moving through Puerto Rico is sold to domestic users. According to the DEA’s 2016 annual report, between 70 and 80 percent of the cocaine that arrives on the island is sent to the United States, while the rest is consumed by the local market.

Wow.

Conclusion

Puerto Rico is in a lot of trouble structurally, financially and morally.

Throwing excessive money their way may only exacerbate these problems. There has to be a better way.